We Need Policy - Not Politics - To Rebuild America

Lynn Tilton, CEO Patriarch Partners
This week, House Republican Leader, John Boehner, called on President Obama to fire his economic team.

As recovery wanes, dissatisfaction runs deep, but this public appeal seems more the initiate of a campaign for majority House Speaker than the proffer of solution to the financial downturn that plagues our nation.

While I agree that Timothy Geithner and Lawrence Summers have not delivered on the administration's promise of economic recovery, we need not a change of the guard and a revamp of rhetoric - we need a business plan to rebuild America. Only changes in policy will ignite job creation and fuel a sustainable economic turnaround. The urgency of transformation is more about principle than people. Infrastructure issues demand appropriate actions. We must make a commitment to manufacturing and modify policies to support that pledge.

Many foreign countries subsidize raw materials by as much as 30% - this equates to dumping, not free trade. Such truth belies America's inability to compete in the global economy. We close our eyes to what we choose not to see. Immediate changes to policy could put Americans to work now, and place our country on the fast track to a sustained recovery. The United States government should subsidize value-added jobs, and mandate their Department of Defense's $140 billion procurement budget be spent on American manufactured goods. To witness the wisdom of subsidized employment, we need look no farther than Germany. Germans take pride in their industrial base; America once shared that sentiment. Today, Germany's unemployment rate is 7.6%, 3 million of a total workforce of 42 million. America's current 9.5% unemployment rate equals almost 15 million out-of-work citizens.

The more accurate count of unemployed hovers at 30 million when including the discouraged workers, the part-timers who long for full-time positions and the permanently unemployed. Germany has successfully maintained its manufacturing workforce by assisting employers through a program affectionately called "short work." In essence, during times of economic distress, workers are granted reduced hours by companies while the German government supports their wages up to 85% of full-time salary.

In Germany, they pay their citizens to work - Americans are paid to stay home. Subsidized employment does not equate to additional government or taxpayer costs. Rather, it is the difference between an expensive band-aid and less costly value-added solution; the government contribution to workers' paychecks is an alternative to unemployment benefits.

Companies that would otherwise engage in mass layoffs or liquidate are provided with temporary support to keep workers employed. More companies survive downturns, benefits are shorter in duration and the debate on benefit abuse is eradicated. Each job saved is multiplied by at least 5 more employed as an economic effect on a town or city. Executed properly, this is a win-win. Involuntary unemployment has devastating effects on American workers and families. Studies show job loss correlates to depression and despair to illness, creating a downward spiral of government costs beyond benefits. Loss of American employment decreases household wealth, reducing consumption of locally manufactured goods and further stifling job creation. Joblessness, homelessness and hopelessness have enveloped our nation. As November's mid-term elections approach, politicians will engage in negative debate and critique absent solutions, bringing us no closer to job creation and economic growth. Rebuilding America must start with a plan, not politics. Subsidized employment and the sole source allocation of Department of Defense dollars to American goods must be followed by trade policies that eradicate foreign advantage.

The Department of Defense's $140 billion procurement budget equates to revenues of General Electric, America's second largest employer with more than 300,000 workers. Buying American could create hundreds of thousands of new jobs. Rather than political sparring and stonewalling, a more noble approach would be to stand shoulder to shoulder to create employment and rebuild America.

A business plan to restructure our economy can be designed — the tools are within our reach. It starts with a commitment to our nation that overshadows party loyalties and ideological preconceptions.